Worker cooperatives around California are being impacted by a new law requiring worker-owners to purchase workers compensation insurance. As a result, many cooperatives will have to cut worker pay and benefits. Will you join us in the effort to change the law?
Background on the Current Workers Compensation Legislation
In 2016, the California Legislature passed AB 2883, making changes to the workers compensation law that failed to take into account and will have an adverse impact on cooperatives. Previously, workers compensation insurance was not required for managing owners of businesses. This is still true for LLCs and partnerships, but AB 2883 made a very significant change for corporations, requiring that an owner hold at least 15% of the shares in order to waive workers compensation coverage. AB 2883 failed to consider the impact on cooperatives where members manage an enterprise collectively.
Previously, some worker cooperatives in California chose not to obtain workers compensation insurance for managing owners, opting instead to apply those funds toward health insurance, long-term disability insurance, or higher wages. In some industries, such as in food businesses, the cost of workers comp insurance will reduce workers’ take-home pay by as much as 15%. One worker-owned cafe has reported that AB 2883 will cause the cooperative to lose $200,000 in 2017. This is a substantial setback for the worker cooperative movement at a time when worker-ownership has been recognized as a path to better and more stable livelihoods in California. The new Labor Code laws as passed under AB 2883 have major implications. Read our guide on how to navigate the new worker's comp law on our blog here!
Worker-owners of a handful of cooperatives, including The Cheese Board Collective, Three Stone Hearth, Home Green Home, Drought Smart, Arizmendi Bakery, and Echo Adventures Team, have convened to form a campaign working group to change the law. Right now, we are gathering support from other cooperatives and organizations impacted by AB 2883.
Sign the Petition
This petition will call on California legislators to pass a bill that would give cooperatives the right to opt out of the workers compensation requirement. The bill would essentially restore the previous provisions of the law in its application to Cooperative Corporations: In cooperatives where all members serve as officers or directors, those members will be allowed to waive workers compensation coverage.
By adding your name to the petition, you are indicating your support for a bill that would allow cooperatives to opt out of the workers compensation requirement.
By Sustainable Economies Law Center (SELC) Community Renewable Energy Intern, Adrien Salazar
I arrive on a day when the kids are learning about the Filipina revolutionary hero Gabriela Silang, making pinakbet, a vegetable stew, and getting familiar with the Tagalog words for emotions and feelings. I come to the Lakeshore United Methodist Church community center to find a group of kids chopping up vegetables with their instructor, chef and farmer Aileen Suzara.Read more
By Sustainable Economies Law Center (SELC) Director of Economic Democracy, Ricardo Nuñez
There has been a constant stream of depressing and demoralizing news this summer. A dysfunctional political system, continuing police violence against our black and brown brothers and sisters, and an economic system that continues to exacerbate income inequality. At times like these, we only need to look within our own communities to find hope and renewal. SELC Summer Institute interns teamed up with interns from Project Equity and the Community Economic Justice Clinic at EBCLC to take a day to visit spaces of an economy that redirects wealth and control back to communities; an economy based on solidarity. Below, our summer interns share their reflections on the spaces we visited, spaces where individuals are taking collective action to live out the solidarity economy SELC and our allies are working to build.
Thank you to Design Action Collective, the Arizmendi Association of Cooperatives, Mandela Food Cooperative, Arizmendi Lakeshore Cooperative, the Addison Court Housing Cooperative and land trust, and Phat Beets for sharing your stories of resilience and solidarity!Read more
By Sustainable Economies Law Center Executive Director, Janelle Orsi
Imagine that a group of people works hard to fill their neighborhood with urban farms, bike lanes, parks, murals, community services, and education programs. Next, imagine that those same people are forced to move away. Ouch, that bites.
Sadly, this is real: Improving the livability of a previously disinvested neighborhood creates opportunities for speculators, landlords, and developers to increase rents and drive up the cost of property, often causing displacement of the very people who made the neighborhood livable to begin with.Read more
By Sustainable Economies Law Center (SELC) Summer Intern, Adrien Salazar
Communities of color have played and continue to play a pivotal role in realizing alternative economies in response to chronic economic exclusion in the United States. The history of civil rights is entwined with the history of cooperative economics in the United States. Jessica Gordon Nembhard, in her book Collective Courage, demonstrates this history in her account of black cooperatives and collectives in the United States. Nembhard documents the many black communities that organized cooperatives by necessity to build economic power in marginalized communities.Read more
By Sara Stephens, Sustainable Economies Law Center (SELC) Housing and Cooperatives Attorney
We want to create a worker cooperative…what legal entity should we form?
This is probably the most common question I hear at our Resilient Communities Legal Cafes. Lots of entrepreneurs come to us wanting to form a worker-owned business, but they are unsure what legal structure will work best for them. Are they required to form as a cooperative corporation? What if they’re not ready to incorporate yet? Can they form as an LLC or some other entity and still be a cooperative? What are the benefits and drawbacks of the entity options?Read more
Host your own "Learning to Think Outside the Boss" workshop!
Thank you for your interest in hosting"Learning to Think Outside the Boss: An Introductory Workshop on the Legal Nuts and Bolts of Starting a Worker Cooperative!" Below, find resources we've created to teach about how the law works in, against, and for worker cooperatives. This is a shorter, participatory, discussion-orientated version of our half day "Think Outside the Boss" workshop.
NOTE: These materials are updated at irregular intervals and might change from time to time. Updates are based on feedback from participants and those who facilitate the "Learning to Think Outside the Boss" workshop. Please send questions, feedback, or comments about this guide to email@example.com.
What is it?
This workshop provides an introduction to the practical steps individuals and groups need to take to establish, build, and successfully manage a cooperative enterprise. This introductory workshop attempts to bring forward basic legal and structural questions such as what is a cooperative, what is a legal entity, what rules govern fundraising and financing for cooperatives, and more. This workshop provides an overview of the content contained in Sustainable Economies Law Center's Think Outside the Boss: How to Create a Worker-Owned Business manual.
Why Do it?
This workshop is meant to provide an introduction for those looking to support cooperative development and for entrepreneurs and activists seeking to build a worker cooperative. By the end of the workshop, participants should be able to
- have a basic understanding of the cooperative form from a functional and principled perspective,
- understand the Cooperative Principles in practice,
- distinguish cooperatives from other business forms,
- distinguish between the different kinds of cooperatives,
- understand basic questions that should be asked when founding a worker cooperative,
- and think about cooperatives as they relate to the needs in their lives.
Facilitators should use a combination of lecture (minimal), experiential learning, and popular education techniques to engage the group actively in the process of learning about worker cooperatives and cooperative business development.
Beginning in 2013, SELC and the East Bay Community Law Center have been hosting half day workshops called "Think Outside the Boss" three times per year in the San Francisco Bay Area. These Think Outside the Boss workshops provide community members an introduction into the nuts and bolts of starting and running a cooperatively owned business. We go over legal issues in an accessible way to help you understand the relationships between cooperatives, employment, and community wealth-building. Attorneys, law students, and experienced cooperative professionals give short presentations on legal issues, governance structures, financing, and more. We also typically host breakout sessions on specialized topics with attorneys, cooperative accountants, business planning specialists, and discussions led by cooperative worker-members. To find the next Think Outside the Boss workshop, please visit theselc.org/events.
This facilitator’s guide was originally prepared for the 2014 JACKSON RISING: NEW ECONOMIES CONFERENCE in Jackson, Mississippi. Their clarion call to build a broad based solidarity economy in the southern US led us to deepen our intention of making legal education accessible to those building economic democracy all around the country. With feedback from the worker cooperative community, allies, and others who use our resources, we have attempted to refine this facilitator’s guide in order to increase its usefulness to the movement. We hope this guide can introduce cooperative entrepreneurs, practitioners, and cooperative developers to the basic legal concepts when starting and operating a worker-owned cooperative.
THIS GUIDE WAS PREPARED FOR A 2016 WORKSHOP ON STARTING A WORKER-OWNED BUSINESS. THE CONTENTS OF THIS GUIDE AND ACCOMPANYING THINK OUTSIDE THE BOSS MANUAL SHOULD NOT BE RELIED ON AS LEGAL ADVICE.
ALSO, SOME OF THIS INFORMATION COULD BECOME OUTDATED, AND LAWS VARY FROM PLACE-TO-PLACE. FURTHERMORE, ALTHOUGH WE TRIED TO COLLECT ACCURATE INFORMATION AND GIVE THE LAWS OUR BEST INTERPRETATION, SOME INFORMATION IN THIS GUIDE AND ACCOMPANYING MANUAL COULD EVEN TURN OUT TO BE INCORRECT OR SUBJECT TO OTHER INTERPRETATIONS BY COURTS OR REGULATORS! WE SURE HOPE THAT’S NOT THE CASE, BUT, WHAT CAN WE SAY? LAW IS COMPLICATED STUFF! THAT'S WHY WE STRONGLY RECOMMEND THAT YOU CONSULT WITH AN ATTORNEY BEFORE USING THIS INFORMATION TO FORM OR OPERATE A COOPERATIVE.
Araz Hachadourian of Yes! Magazine covers the passing of a co-op resolution in Berkeley, CA which requires the city to create an ordinance that supports worker owned cooperatives. Sustainable Economies Law Center (SELC) Policy Director, Yassi Eskandari-Qajar, is quoted extensively about how worker cooperatives benefit cities and communities.Read more
By Chris Tittle, Sustainable Economies Law Center (SELC) Director of Organizational Resilience
Last August, 200 people from across Oakland, California came together to envision and design a development plan for a small parcel of public land. For months leading up to that day, community members and neighborhood coalitions had been organizing against a controversial - and possibly illegal - plan to develop a luxury high-rise apartment complex on land owned by the City of Oakland, in a neighborhood where 75% of residents are low or very-low income and 75% are renters. Having succeeded in pressuring the City to back out of the initially proposed deal with UrbanCore Development through creative direct action and sophisticated community organizing, organizers with the E12th St Coalition wanted to create a visionary community-driven alternative - and the E12th WishList People’s Planning Forum was convened. On a sunny Sunday afternoon near Oakland’s Lake Merritt, hundreds of people shared their visions for what could be done with this public land - and not a single person envisioned a market-rate housing complex on that site.Read more
FOR IMMEDIATE RELEASE
Berkeley Passes Resolution Supporting
BERKELEY, CA (February 9, 2016) — On Tuesday, the City of Berkeley made a bold proclamation in support of democratic and equitable workplaces, passing City Councilmember Jesse Arreguín’s “Resolution Supporting the Development and Growth of Worker Cooperatives.”Read more